FCC REVISTS RULES RESTRICTING REACH OF CABLE

Move Comes Four Years After Court Strikes Down Subscriber Limits

WASHINGTON (AdAge.com) -- As cable giants Comcast and Time Warner Cable prepare to carve up Adelphia Communications, the Federal Communications Commission is setting its focus again on the contentious issue of media consolidation.

The FCC today formerly reopened discussion into federal rules restricting the size of cable companies four years after an appellate court struck down the government's old regulatory scheme. The FCC asked industry executives, detractors and the public for comments as to when concentration of media properties impacts the ability of program providers and networks to offer and support diverse programming.

30% subscriber rule
Under the previous rules, a cable company was barred from having more than 30% of the nation's cable subscribers and from devoting more than 40% of its active channels to those they owned on any system offering 75 or fewer channels. An appellate court struck down the rules, saying the FCC had never adequately justified the need for specific limits.

Meanwhile, through the Adelphia deal's acquisitions and swaps, Comcast stands to gain 1.8 million subscribers and Time Warner will likely add 3.5 million. Comcast will end up with a total of 23.3 million subscribers and Time Warner with 14.4 million. According to Nielsen Media Research, quoted by the National Cable & Telecommunications Association, as of November 2004, there are more than 75 million cable subscribers.

Concentrated on broadcast
After the appellate court's decision the FCC never moved forward on new cable rules, even after asking for comment, as it concentrated instead on amending broader broadcast ownership rules. Those rules also were eventually overturned as well.

In the original comments, program providers warned against consolidation while cable companies said there is little evidence concentration affects programming choice.

“They have been sitting on it for four years,” said Andy Schwartzman, director of the Media Access Project, a public interest law firm. “It’s a signal from [new FCC Chairman] Kevin J. Martin that he doesn’t intend to play stall ball. I may not be happy with the result, but at least it will get completed.”

Changes in the industry
The FCC in its notice today said it is seeking additional comment because the record is four years old and a number of changes have occurred in the industry, including the further growth of satellite TV.

They said seeking new comments prolongs the process and further delays any certainty as to what will happen, but they also said they were “pleased” that the commission is starting with the idea that there will be new limits.

“We hope cable operators and other parties do not argue that there should be no numerical limits, but instead provide appropriate and necessary information to help us implement the clear command of the statute. We need to work efficiently and productively to establish numerical limits ... as soon as possible,” they said.